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CHX - ChampionX News Story

$20.48 -0.3  -1.6%

Last Trade - 09/04/21

Sector
Energy
Size
Large Cap
Market Cap £3.00bn
Enterprise Value £3.53bn
Revenue £1.39bn
Position in Universe 1578th / 6827

ChampionX Reports Fourth Quarter and Full Year 2020 Results

Tue 23rd February, 2021 10:30pm
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* Revenue of $706.1 million in Q4’20
* Net income attributable to ChampionX of $7.4 million in Q4’20; adjusted
net income of $14.3 million
* Adjusted EBITDA of $108.6 million in Q4’20
* Cash from operating activities of $120.6 million and free cash flow of
$107.6 million (15% of revenue) in Q4’20; free cash flow of $115.5 million
(16% of revenue) excluding acquisition-related expenses
* Repaid $79.8 million of debt in Q4’20
THE WOODLANDS, Texas, Feb. 23, 2021 (GLOBE NEWSWIRE) -- ChampionX Corporation
(“ChampionX”) (NASDAQ: CHX) (“the Company”) today announced fourth
quarter of 2020 results, our second full quarter following the June 3, 2020
combination of the Company with the legacy ChampionX business, and our full
year 2020 results.

For the fourth quarter of 2020, revenue was $706.1 million, net income
attributable to ChampionX was $7.4 million, and adjusted EBITDA was $108.6
million. Income before income taxes margin was 2.7%, and adjusted EBITDA
margin was 15.4%. Cash provided by operating activities was $120.6 million, an
increase of $9.2 million sequentially, and free cash flow was $107.6 million.

Results on a pro forma basis for ChampionX for prior periods are provided
supplementary to the actual results of the Company and represent results on a
full-year basis as if legacy ChampionX was combined with the Company for the
entire period. For additional information on the pro forma results see the
tables included in this release.(i)

CEO Commentary

“We are proud of how remarkably well our organization performed in the
fourth quarter and during the course of 2020 as we completed our successful
transformational merger with ChampionX and demonstrated the resiliency of our
portfolio against the backdrop of the global pandemic and one of the most
challenging periods in the history of the energy industry. I am grateful to
all of our employees for their dedication and commitment to improving the
lives of our customers and communities, and we remain committed to taking all
necessary steps to protect the health and safety of our employees,“
ChampionX’s President and Chief Executive Officer Sivasankaran “Soma”
Somasundaram said.

“During the fourth quarter, which marked just our second full quarter as a
new company, we delivered adjusted EBITDA of $109 million, which represented a
sequential increase of 25%. Benefiting both from the recovery of the 2020
downturn and seasonal tailwinds, we generated fourth quarter revenue of $706
million, which increased 11% sequentially, with both our North American and
international revenues posting double-digit sequential growth during the
period.

“We once again demonstrated the strong positive free cash flow profile of
our Company as we generated free cash flow of $108 million in the fourth
quarter and we further strengthened our balance sheet by repaying $80 million
of debt during the quarter. We ended the quarter with $551 million of
liquidity, including $201 million of cash and $350 million of available
capacity on our revolver. We remain focused on our free cash flow generation
and we intend to continue paying down debt this year.

“Our team continues to execute well on our merger integration plans and we
still anticipate fully capturing our increased targeted cost synergies of $125
million within 24 months of the merger closing.

“As we look to the first quarter, we expect seasonal declines in our
international operations, partially offset by anticipated continued positive
momentum in our shorter-cycle North American land-oriented businesses. We
anticipate some near-term cost pressures as oilfield activity levels normalize
versus the pandemic-induced trough levels of last year, but we expect
year-over-year margin improvement as we exit 2021. We are currently assessing
the first quarter impact of the severe winter storms in major oil producing
basins, so our guidance does not include the impact of extreme weather
challenges experienced in February. Excluding winter storm impacts, on a
consolidated basis, in the first quarter we expect revenue to be between $650
million and $700 million, and we expect adjusted EBITDA of $90 million to $100
million.

“We are excited about the prospects for our Company as this year unfolds and
we believe that our disciplined operating model, differentiated products and
technology, robust free cash flow, and production-oriented portfolio, combined
with our strong and motivated team, will enable us to be a long-term winner in
the energy transition.”

ChampionX Actual Results

                                                                         Three Months Ended                                                                     Variance                         
 (dollars in thousands, except per share amounts)                        Dec 31, 2020               Sep 30, 2020                   Dec 31, 2019                 Sequential       Year-over-year  
 Revenue                                                                 $      706,122             $     633,526                  $     247,748                11%              N/M             
                                                                                                                                                                                                 
 Net income (loss) attributable to ChampionX                             $      7,357               $     (7,914   )               $     (1,823   )             N/M              N/M             
 Diluted earnings (loss) per share attributable to ChampionX             $      0.04                $     (0.04    )               $     (0.02    )             N/M              N/M             
                                                                                                                                                                                                 
 Adjusted net income (loss) attributable to ChampionX                    $      14,329              $     5,451                    $     10,287                 N/M              39%             
 Adjusted diluted earnings (loss) per share attributable to ChampionX    $      0.07                $     0.03                     $     0.13                   N/M              (46)%           
                                                                                                                                                                                                 
 Income (loss) before income taxes                                       $      19,007              $     (11,294  )               $     (10,622  )             N/M              N/M             
 Income (loss) before income taxes margin                                2.7             %          (1.8           )     %         (4.3           )     %       N/M              N/M             
                                                                                                                                                                                                 
 Adjusted EBITDA                                                         $      108,645             $     86,822                   $     44,643                 25%              N/M             
 Adjusted EBITDA margin                                                  15.4            %          13.7                 %         18.0                 %       170 bps          (260) bps       
                                                                                                                                                                                                 
 Net cash provided by operating activities                               $      120,608             $     111,399                  $     32,509                 $9,209           $88,099         
 Capital expenditures                                                    $      12,994              $     12,847                   $     8,191                  $147             $4,803          
 (N/M - not meaningful)                                                                                                                                                                          

ChampionX consolidated actual results in the fourth quarter and third quarter
of 2020 include results of operations of the legacy Apergy businesses and
results from legacy ChampionX for the entire period. Fourth quarter 2019
results represent results of operations of the legacy Apergy businesses.

In the fourth quarter of 2020, consolidated revenue increased $72.6 million,
or 11%, sequentially, due to the continued recovery from the pandemic-induced
downturn, as well as seasonal improvements internationally. Sequentially,
international revenue increased 12% and North America revenue increased 11%.
Fourth quarter 2020 consolidated revenue includes $46.2 million of chemical
sales to Ecolab Inc. as compared to $49.5 million in the third quarter. As
part of the Merger, the Company entered into a Cross Supply and Product
Transfer Agreement with Ecolab in which certain products will be manufactured
by one party for the other and sold at cost over a period of no longer than
three years from the merger date. Revenue associated with these sales is
reported in Corporate and Other within our financial statements.

In the fourth quarter of 2020, consolidated net income attributable to
ChampionX was $7.4 million, and adjusted net income was $14.3 million.
Consolidated adjusted EBITDA was $108.6 million, which increased $21.8
million, sequentially, or 25%, due to higher volumes.

Production Chemical Technologies - Actual Results

                                   Three Months Ended                                   Variance    
 (dollars in thousands)            Dec 31, 2020                Sep 30, 2020             Sequential  
 Revenue                           $      446,652              $      410,151           9%          
 Operating profit                  $      49,200               $      35,172            40%         
 Operating profit margin           11.0            %           8.6             %        240 bps     
 Adjusted segment EBITDA           $      77,872               $      71,505            9%          
 Adjusted segment EBITDA margin    17.4            %           17.4            %        — bps       

In the fourth quarter of 2020, Production Chemical Technologies revenue
increased $36.5 million, or 9%, sequentially, due to strong Latin America
orders, continued recovery in our North America business, and higher seasonal
international volumes. Sequentially, international revenue increased 12% and
North America revenue increased 5%.

In the fourth quarter of 2020, segment operating profit was $49.2 million.
Segment adjusted EBITDA was $77.9 million, which increased $6.4 million,
sequentially, or 9%, primarily due to higher volume.

Production & Automation Technologies - Actual Results

                                   Three Months Ended                                                                     Variance                         
 (dollars in thousands)            Dec 31, 2020                   Sep 30, 2020                   Dec 31, 2019             Sequential       Year-over-year  
 Revenue                           $     158,777                  $     136,921                  $      203,625           16%              (22)%           
 Operating profit (loss)           $     (4,724   )               $     (7,454   )               $      2,175             (37)%            N/M             
 Operating profit (loss) margin    (3.0           )     %         (5.4           )     %         1.1             %        240 bps          (410) bps       
 Adjusted segment EBITDA           $     29,345                   $     24,995                   $      35,668            17%              (18)%           
 Adjusted segment EBITDA margin    18.5                 %         18.3                 %         17.5            %        20 bps           100 bps         
 (N/M - not meaningful)                                                                                                                                    

In the fourth quarter of 2020, Production & Automation Technologies revenue
increased $21.9 million, or 16%, sequentially, due to higher volumes as E&P
capital spending continued to recover from the rapid reduction experienced
earlier in 2020. Sequentially, North America revenue increased 21% and
international revenue decreased 3%. Production & Automation Technologies
revenue decreased $44.8 million, or 22%, year-over-year, due to lower volumes
driven by the decline in worldwide E&P capital spending.

Revenue from digital products was $21.8 million in the fourth quarter of 2020,
an increase of $3.0 million, or 16%, compared to $18.9 million in the third
quarter of 2020.

In the fourth quarter of 2020, segment operating loss was $4.7 million.
Segment adjusted EBITDA was $29.3 million, which increased $4.4 million
sequentially, or 17%, primarily due to higher volume. Segment adjusted EBITDA
decreased $6.3 million, or 18%, year-over-year, due to lower volumes,
partially offset by cost reduction actions.

Drilling Technologies - Actual Results

                                   Three Months Ended                                                              Variance                         
 (dollars in thousands)            Dec 31, 2020              Sep 30, 2020                  Dec 31, 2019            Sequential       Year-over-year  
 Revenue                           $      23,568             $     15,715                  $      44,123           50%              (47)%           
 Operating profit (loss)           $      153                $     (5,127  )               $      8,644            N/M              (98)%           
 Operating profit (loss) margin    0.6            %          (32.6         )     %         19.6           %        3320 bps         (1900) bps      
 Adjusted segment EBITDA           $      2,525              $     (2,782  )               $      11,412           N/M              (78)%           
 Adjusted segment EBITDA margin    10.7           %          (17.7         )     %         25.9           %        2840 bps         (1520) bps      
 (N/M - not meaningful)                                                                                                                             

In the fourth quarter of 2020, Drilling Technologies revenue increased by $7.9
million, or 50%, sequentially, driven primarily by the increase in U.S. land
drilling activity and customer restocking of polycrystalline diamond cutter
inventories. Drilling Technologies revenue decreased $20.6 million, or 47%,
year-over-year, driven by the significant decline in worldwide drilling
activity and customer destocking of polycrystalline diamond cutter
inventories.

Diamond bearings revenue in the fourth quarter of 2020 was $2.2 million, up
$0.2 million, or 10%, sequentially.

In the fourth quarter of 2020, segment operating profit was $0.2 million, and
segment adjusted EBITDA was $2.5 million. Sequentially, segment adjusted
EBITDA increased by $5.3 million, due to higher volumes. Year-over-year,
segment adjusted EBITDA decreased by $8.9 million, or 78%, as a result of
lower volumes, partially offset by cost reduction actions.

Sequentially, the average worldwide and U.S. rig counts increased 3% and 22%,
respectively. On a year-over-year basis, the average worldwide and U.S. rig
counts declined 49% and 62%, respectively.

Reservoir Chemical Technologies - Actual Results

                                   Three Months Ended                                     Variance    
 (dollars in thousands)            Dec 31, 2020               Sep 30, 2020                Sequential  
 Revenue                           $      30,937              $     21,264                45%         
 Operating profit (loss)           $      432                 $     (3,819  )             N/M         
 Operating profit (loss) margin    1.4            %           (18.0         )     %       1940 bps    
 Adjusted segment EBITDA           $      2,204               $     (1,432  )             N/M         
 Adjusted segment EBITDA margin    7.1            %           (6.7          )     %       1380 bps    

In the fourth quarter of 2020, Reservoir Chemical Technologies revenue
increased by $9.7 million, or 45%, sequentially, driven by the increase in
global land well construction and completion activity.

In the fourth quarter of 2020, segment operating profit was $0.4 million, and
segment adjusted EBITDA was $2.2 million. Sequentially, segment adjusted
EBITDA increased by $3.6 million, due to higher volumes.

Other Business Highlights
* ChampionX improved lives in 2020, as we achieved our best safety performance
ever in both number of injuries (50% reduction) and severity (30% reduction in
lost time injury rate).
* In our recently concluded global employee engagement survey, ChampionX had a
71% global participation rate from our employees.
* Production Chemical Technologies was awarded two significant contracts in
West Africa with two different global energy companies.
* Production & Automation Technologies experienced increased customer adoption
of our PowerFit motors for ESP applications.
* Within our Production & Automation Technologies segment, we are seeing early
momentum and revenue uplift from Better Together joint sales efforts,
including recent wins in the Permian and Latin America regions.
* Our Digital team signed a global software agreement with an integrated
energy company for the use of our XSPOC artificial lift optimization software.
* During the fourth quarter of 2020, more than 70% of Drilling Technologies
revenue was generated from products that were less than three years old.
* Reservoir Chemical Technologies won incremental work with leading U.S. E&P
operators, advancing our direct sales model.
* ChampionX is on plan to complete remediation of 2019 material weaknesses in
internal controls as of December 31, 2020.
* In developing its Environmental, Social and Governance (ESG) framework and
roadmap, ChampionX initiated an ESG priorities assessment project.
Conference Call Details

ChampionX will host a conference call on Wednesday, February 24, 2021, to
discuss its fourth quarter 2020 financial results. The call will begin at
10:00 a.m. Eastern Time. Presentation materials that supplement the conference
call are available on ChampionX’s website at investors.championx.com.

To listen to the call via a live webcast, please visit ChampionX’s website
at investor.championx.com. The call will also be available by dialing
1-888-424-8151 in the United States and Canada or 1-847-585-4422 for
international calls. Please call approximately 15 minutes prior to the
scheduled start time and reference ChampionX conference call number 9069100.

A replay of the conference call will be available on ChampionX’s website or
at
https://onlineexperiences.com/Launch/QReg/ShowUUID=3A0F2ACA-3289-48AB-A8E5-87CAB1888BF68&LangLocaleID=1033.
Enter passcode 50078440.

Results on a Pro Forma Basis

On June 3, 2020, Apergy Corporation closed on the acquisition of ChampionX
Holding, Inc. (“the Transaction”) and assumed the name ChampionX
Corporation (“ChampionX”). Actual results reflect the respective
contributions from each company based on the close of the Transaction. For
comparative purposes, management has also presented herein certain unaudited
pro forma financial information as if the Transaction was completed on January
1, 2019, including results on a pro forma basis for revenue, income (loss)
before income taxes, income (loss) before income taxes margin, adjusted
EBITDA, adjusted EBITDA margin, segment revenue, segment operating profit
(loss), adjusted segment EBITDA, and adjusted segment EBITDA margin for the
quarterly periods ended December 31, 2020, September 30, 2020, and
December 31, 2019, and for the full year periods ended December 31, 2020 and
December 31, 2019. The financial results on a pro forma basis are provided to
assist investors in assessing ChampionX’s performance on a basis that
includes the combined results of operations of both Apergy Corporation and
ChampionX Holding, Inc. for the full reporting period. ChampionX management
believes this unaudited pro forma historical financial information helps
investors understand the long-term profitability trends of its newly combined
business giving effect to the Transaction and facilitates comparisons of our
profitability to prior and future periods and to our peers. The historical
financial results on a pro forma basis herein may not be comparable to
similarly titled measures reported by other companies.

About Non-GAAP Measures

In addition to financial results determined in accordance with generally
accepted accounting principles in the United States (“GAAP”), this news
release presents non-GAAP financial measures. Management believes that
adjusted EBITDA, adjusted EBITDA margin, adjusted segment EBITDA, adjusted
segment EBITDA margin, adjusted net income attributable to ChampionX, adjusted
diluted earnings per share attributable to ChampionX, pro forma adjusted
EBITDA, pro forma adjusted EBITDA margin, pro forma segment revenue, pro forma
segment operating profit (loss), and pro forma adjusted segment EBITDA reflect
the core operating results of our businesses and help facilitate comparisons
of operating performance across periods. In addition, free cash flow and free
cash flow to revenue ratio are used by management to measure our ability to
generate positive cash flow for debt reduction and to support our strategic
objectives, while adjusted working capital provides a meaningful measure of
operational results by showing changes caused by revenue or our operational
initiatives. The foregoing non-GAAP financial measures should be considered in
addition to, not as a substitute for or superior to, other measures of
financial performance prepared in accordance with GAAP. A reconciliation of
these non-GAAP measures to the comparable GAAP measures is included in the
accompanying financial tables.

This press release also contains certain forward-looking non-GAAP financial
measures, including adjusted EBITDA. Due to the forward-looking nature of the
aforementioned non-GAAP financial measure, management cannot reliably or
reasonably predict certain of the necessary components of the most directly
comparable forward-looking GAAP measures, such as net income. Accordingly, we
are unable to present a quantitative reconciliation of such forward looking
non-GAAP financial measures to their most directly comparable forward-looking
GAAP financial measures. Amounts excluded from these non-GAAP measures in
future periods could be significant. Management believes the aforementioned
non-GAAP financial measures are good tools for internal use and the investment
community in evaluating ChampionX’s overall financial performance.

About ChampionX

ChampionX (formerly known as Apergy Corporation) is a global leader in
chemistry solutions and highly engineered equipment and technologies that help
companies drill for and produce oil and gas safely and efficiently around the
world. ChampionX’s products provide efficient functioning throughout the
lifecycle of a well with a focus on the production phase of wells.To learn
more about ChampionX, visit our website at www.championX.com.

Forward-Looking Statements

This news release contains statements relating to future actions and results,
which are "forward-looking statements" within the meaning of the Securities
Exchange Act of 1934, as amended, and the Private Securities Litigation Reform
Act of 1995. Such statements relate to, among other things, ChampionX's
market position and growth opportunities.  Forward-looking statements
include, statements related to ChampionX’s expectations regarding the
performance of the business, financial results, liquidity and capital
resources of ChampionX. Forward-looking statements are subject to inherent
risks and uncertainties that could cause actual results to differ materially
from current expectations, including, but not limited to, changes in economic,
competitive, strategic, technological, tax, regulatory or other factors that
affect the operation of ChampionX’s businesses. You are encouraged to refer
to the documents that ChampionX files from time to time with the Securities
and Exchange Commission (“SEC”), including the “Risk Factors” in
ChampionX’s Quarterly Report on Form 10-Q for the period ended June 30,
2020, and in ChampionX’s other filings with the SEC. Readers are cautioned
not to place undue reliance on ChampionX’s forward-looking statements.
Forward-looking statements speak only as of the day they are made
and ChampionX undertakes no obligation to update any forward-looking
statement, except as required by applicable law.        

Investor Contact: Byron Pope
byron.pope@championx.com
281-602-0094

Media Contact: John Breed
john.breed@championx.com
281-403-5751

(i) Adjusted net income (loss) attributable to ChampionX, adjusted EBITDA,
adjusted EBITDA margin, adjusted segment EBITDA, adjusted segment EBITDA
margin, pro forma revenue, pro forma adjusted EBITDA, pro forma adjusted
EBITDA margin, pro forma adjusted segment EBITDA, pro forma adjusted segment
EBITDA margin, free cash flow, and free cash flow to revenue are non-GAAP
measures. See section titled “About Non-GAAP Measures” included herein for
details on the non-GAAP measures used in this release.





CHAMPIONX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(UNAUDITED)

                                                           Three Months Ended                                                             Years Ended                                        
                                                           Dec 31,                    Sep 30,                    Dec 31,                  December 31,                                       
 (in thousands, except per share amounts)                  2020                       2020                       2019                     2020                          2019                 
 Revenue                                                   $     706,122              $     633,526              $     247,748            $      1,899,996              $     1,131,251      
 Cost of goods and services                                539,979                    505,066                    175,114                  1,490,824                     754,147              
 Gross profit                                              166,143                    128,460                    72,634                   409,172                       377,104              
 Selling, general and administrative expense               132,811                    122,156                    75,047                   463,767                       274,268              
 Goodwill and long-lived asset impairment                  —                          —                          —                        657,251                       1,746                
 Interest expense, net                                     15,495                     15,935                     9,075                    51,731                        39,301               
 Other (income) expense, net                               (1,170         )           1,663                      (866           )         (828              )           2,603                
 Income (loss) before income taxes                         19,007                     (11,294        )           (10,622        )         (762,749          )           59,186               
 Provision for (benefit from) income taxes                 11,526                     (3,962         )           (9,048         )         (20,396           )           6,226                
 Net income (loss)                                         7,481                      (7,332         )           (1,574         )         (742,353          )           52,960               
 Less: Net income attributable to noncontrolling interest  124                        582                        249                      1,577                         796                  
 Net income (loss) attributable to ChampionX               $     7,357                $     (7,914   )           $     (1,823   )         $      (743,930   )           $     52,164         
                                                                                                                                                                                             
 Earnings (loss) per share attributable to ChampionX:                                                                                                                                        
 Basic                                                     $     0.04                 $     (0.04    )           $     (0.02    )         $      (5.01      )           $     0.67           
 Diluted                                                   $     0.04                 $     (0.04    )           $     (0.02    )         $      (5.01      )           $     0.67           
                                                                                                                                                                                             
 Weighted-average shares outstanding:                                                                                                                                                        
 Basic                                                     199,913                    199,809                    77,460                   148,370                       77,427               
 Diluted                                                   204,825                    199,809                    77,460                   148,370                       77,624               





CHAMPIONX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

                                            December 31,                                        
 (in thousands)                             2020                          2019                  
 Assets                                                                                         
 Cash and cash equivalents                  $      201,421                $      35,290         
 Receivables, net                           559,545                       219,874               
 Inventories, net                           430,112                       211,342               
 Prepaid expenses and other current assets  74,767                        26,934                
 Total current assets                       1,265,845                     493,440               
                                                                                                
 Property, plant and equipment, net         854,536                       248,181               
 Goodwill                                   680,594                       911,113               
 Intangible assets, net                     479,009                       238,707               
 Other non-current assets                   195,792                       31,384                
 Total assets                               $      3,475,776              $      1,922,825      
                                                                                                
 Liabilities                                                                                    
 Current portion of long-term debt          $      26,850                 $      —              
 Accounts payable                           299,666                       120,291               
 Other current liabilities                  296,044                       79,390                
 Total current liabilities                  622,560                       199,681               
                                                                                                
 Long-term debt                             905,764                       555,291               
 Other long-term liabilities                334,877                       131,639               
 Equity                                                                                         
 ChampionX stockholders’ equity             1,625,971                     1,032,960             
 Noncontrolling interest                    (13,396           )           3,254                 
 Total liabilities and equity               $      3,475,776              $      1,922,825      





CHAMPIONX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

                                                               Years Ended December 31,                                 
 (in thousands)                                                2020                            2019                     
 Cash provided by (used for) operating activities:                                                                      
 Net income (loss)                                             $      (742,353  )              $      52,960            
 Depreciation                                                  142,647                         68,557                   
 Amortization                                                  71,715                          51,381                   
 Goodwill and long-lived asset impairment                      657,251                         1,746                    
 Receivables                                                   58,210                          25,948                   
 Inventories                                                   85,893                          19,065                   
 Accounts payable                                              (18,389          )              (20,526        )         
 Leased assets                                                 (4,606           )              (40,700        )         
 Other                                                         59,672                          (2,532         )         
 Net cash provided by operating activities                     310,040                         155,899                  
                                                                                                                        
 Cash provided by (used for) investing activities:                                                                      
 Capital expenditures                                          (45,163          )              (39,780        )         
 Acquisitions, net of cash acquired                            57,588                          (12,500        )         
 Proceeds from sale of fixed assets                            9,705                           4,598                    
 Payments on sale of business                                  —                               (2,194         )         
 Net cash provided by (used for) investing activities          22,130                          (49,876        )         
                                                                                                                        
 Cash used for financing activities:                                                                                    
 Proceeds from long-term debt                                  125,000                         36,500                   
 Repayment of long-term debt                                   (286,493         )              (141,500       )         
 Debt issuance costs                                           (4,356           )              —                        
 Other                                                         (9,517           )              (7,403         )         
 Net cash used for financing activities                        (175,366         )              (112,403       )         
                                                                                                                        
 Effect of exchange rate changes on cash and cash equivalents  9,327                           (162           )         
                                                                                                                        
 Net increase (decrease) in cash and cash equivalents          166,131                         (6,542         )         
 Cash and cash equivalents at beginning of period              35,290                          41,832                   
 Cash and cash equivalents at end of period                    $      201,421                  $      35,290            





CHAMPIONX CORPORATION
BUSINESS SEGMENT DATA
(UNAUDITED)

                                                                      Three Months Ended                                                                          Years Ended                                            
                                                                      Dec 31,                                 Sep 30,                    Dec 31,                  December 31,                                           
 (in thousands)                                                       2020                                    2020                       2019                     2020                          2019                     
 Segment revenue:                                                                                                                                                                                                        
 Production Chemical Technologies                                     $        446,652                        $     410,151              $     —                  $      992,805                $     —                  
 Production & Automation Technologies                                 158,777                                 136,921                    203,625                  615,918                       884,364                  
 Drilling Technologies                                                23,568                                  15,715                     44,123                   116,186                       246,887                  
 Reservoir Chemical Technologies                                      30,937                                  21,264                     —                        61,507                        —                        
 Corporate and other                                                  46,188                                  49,475                     —                        113,580                       —                        
 Total revenue                                                        $        706,122                        $     633,526              $     247,748            $      1,899,996              $     1,131,251          
                                                                                                                                                                                                                         
 Income (loss) before income taxes:                                                                                                                                                                                      
 Segment operating profit:                                                                                                                                                                                               
 Production Chemical Technologies                                     $        49,200                         $     35,172               $     —                  $      94,294                 $     —                  
 Production & Automation Technologies                                 (4,724            )                     (7,454         )           2,175                    (697,937          )           54,024                   
 Drilling Technologies                                                153                                     (5,127         )           8,644                    2,574                         73,497                   
 Reservoir Chemical Technologies                                      432                                     (3,819         )           —                        (6,198            )           —                        
 Total segment operating profit (loss)                                45,061                                  18,772                     10,819                   (607,267          )           127,521                  
 Corporate and other                                                  10,559                                  14,131                     12,366                   103,751                       29,034                   
 Interest expense, net                                                15,495                                  15,935                     9,075                    51,731                        39,301                   
 Income (loss) before income taxes                                    $        19,007                         $     (11,294  )           $     (10,622  )         $      (762,749   )           $     59,186             
                                                                                                                                                                                                                         
 Operating profit margin / income (loss) before income taxes margin:                                                                                                                                                     
 Production Chemical Technologies                                     11.0                       %            8.6                %       —                  %     9.5                   %       —                    %   
 Production & Automation Technologies                                 (3.0              )        %            (5.4           )   %       1.1                %     (113.3            )   %       6.1                  %   
 Drilling Technologies                                                0.6                        %            (32.6          )   %       19.6               %     2.2                   %       29.8                 %   
 Reservoir Chemical Technologies                                      1.4                        %            (18.0          )   %       —                  %     (10.1             )   %       —                    %   
 ChampionX Consolidated                                               2.7                        %            (1.8           )   %       (4.3           )   %     (40.1             )   %       5.2                  %   
                                                                                                                                                                                                                         
 Adjusted EBITDA                                                                                                                                                                                                         
 Production Chemical Technologies                                     $        77,872                         $     71,505               $     —                  $      171,808                $     —                  
 Production & Automation Technologies                                 29,345                                  24,995                     35,668                   108,863                       179,820                  
 Drilling Technologies                                                2,525                                   (2,782         )           11,412                   17,312                        83,870                   
 Reservoir Chemical Technologies                                      2,204                                   (1,432         )           —                        459                           —                        
 Corporate and other                                                  (3,301            )                     (5,464         )           (2,437         )         (15,257           )           (12,522          )       
 Adjusted EBITDA                                                      $        108,645                        $     86,822               $     44,643             $      283,185                $     251,168            
                                                                                                                                                                                                                         
 Adjusted EBITDA margin                                                                                                                                                                                                  
 Production Chemical Technologies                                     17.4                       %            17.4               %       —                  %     17.3                  %       —                    %   
 Production & Automation Technologies                                 18.5                       %            18.3               %       17.5               %     17.7                  %       20.3                 %   
 Drilling Technologies                                                10.7                       %            (17.7          )   %       25.9               %     14.9                  %       34.0                 %   
 Reservoir Chemical Technologies                                      7.1                        %            (6.7           )   %       —                  %     0.7                   %       —                    %   
 ChampionX Consolidated                                               15.4                       %            13.7               %       18.0               %     14.9                  %       22.2                 %   





CHAMPIONX CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED)

                                                                                           Three Months Ended                                                           Years Ended                                        
                                                                                           Dec 31,                    Sep 30,                   Dec 31,                 December 31,                                       
 (in thousands)                                                                            2020                       2020                      2019                    2020                        2019                   
 Net income (loss) attributable to ChampionX                                               $     7,357                $     (7,914  )           $     (1,823  )         $     (743,930  )           $     52,164           
 Pre-tax adjustments:                                                                                                                                                                                                      
 Goodwill and long-lived asset impairment ((1))                                            —                          —                         —                       657,251                     1,746                  
 Separation and supplemental benefit costs ((2))                                           105                        383                       331                     539                         6,377                  
 Restructuring and other related charges                                                   4,971                      3,426                     2,556                   23,291                      9,307                  
 Environmental costs                                                                       —                          —                         —                       —                           1,988                  
 Acquisition and integration related costs ((3))                                           5,854                      8,665                     9,815                   84,779                      10,145                 
 Acquisition-related adjustments ((4))                                                     (2,878         )           3,511                     —                       6,463                       —                      
 Professional fees related to material weakness remediation and impairment analysis ((5))  512                        940                       2,780                   6,240                       2,780                  
 Intellectual property defense                                                             478                        408                       400                     1,278                       400                    
 Tax impact of adjustments ((6))                                                           (2,070         )           (3,968        )           (3,772        )         (63,368         )           (7,777         )       
 Adjusted net income (loss) attributable to ChampionX                                      14,329                     5,451                     10,287                  (27,457         )           77,130                 
 Tax impact of adjustments ((6))                                                           2,070                      3,968                     3,772                   63,368                      7,777                  
 Net income attributable to noncontrolling interest                                        124                        582                       249                     1,577                       796                    
 Depreciation and amortization                                                             65,101                     64,848                    30,308                  214,362                     119,938                
 Provision for (benefit from) income taxes                                                 11,526                     (3,962        )           (9,048        )         (20,396         )           6,226                  
 Interest expense, net                                                                     15,495                     15,935                    9,075                   51,731                      39,301                 
 Adjusted EBITDA                                                                           $     108,645              $     86,822              $     44,643            $     283,185               $     251,168          
                                                                                                                                                                                                                           
 Diluted earnings (loss) per share attributable to ChampionX:                                                                                                                                                              
 Reported                                                                                  $     0.04                 $     (0.04   )           $     (0.02   )         $     (5.01     )           $     0.67             
 Adjusted                                                                                  $     0.07                 $     0.03                $     0.13              $     (0.19     )           $     0.99             

_______________________
((1)  Includes charges for goodwill and long-lived asset impairments of
$657.3 million in our Production & Automation Technologies segment during the
year ended December 31, 2020. During the year ended December 31, 2019, we
incurred an impairment loss of $1.7 million related to the classification of
our pressure vessel manufacturing business as held for sale. )
((2) Dover Separation and supplemental benefit costs primarily relates to
separation costs, and to a lesser extent, enhanced or supplemental benefits
provided to employees no longer participating in Dover Corporation benefit and
compensation plans. During the year ended December 31, 2019, pursuant to the
provisions of the tax matters agreement with Dover Corporation, we recognized
approximately $3.4 million of tax indemnification expense. This was settled
and paid during the three months ended June 30, 2020.)
((3)  Includes costs incurred in relation to business combinations,
primarily related to the Merger of legacy ChampionX of $0.9 million and $61.8
million for the three months and year ended December 31, 2020, respectively.
Additionally, we incurred professional fees related to the integration of
legacy ChampionX of $4.9 million and $23.0 million for the three months and
year ended December 31, 2020, respectively. )
((4)  Includes revenue associated with the amortization of a liability
established as part of the Merger, representing unfavorable terms under the
Cross Supply Agreement with Ecolab. This is partially offset by incremental
expense related to the step-up of inventory value resulting from the purchase
accounting entries. )
((5)  Includes professional fees related to the remediation of material
weaknesses identified during 2019 as well as professional fees incurred in
connection with the goodwill impairment charge recognized during the three
months ended March 31, 2020.)
((6) We generally tax effect adjustments using a combined federal and state
statutory income tax rate of approximately 23 percent.)





                                                                                     Three Months Ended                                                   Years Ended                                
                                                                                     Dec 31,                Sep 30,                 Dec 31,               December 31,                               
 (in thousands)                                                                      2020                   2020                    2019                  2020                    2019               
 Diluted earnings (loss) per share attributable to ChampionX                         $    0.04              $    (0.04  )           $    (0.02  )         $    (5.01  )           $    0.67          
 Per share adjustments:                                                                                                                                                                              
 Goodwill and long-lived asset impairment                                            —                      —                       —                     4.43                    0.02               
 Separation and supplemental benefit costs                                           —                      —                       —                     —                       0.08               
 Restructuring and other related charges                                             0.02                   0.02                    0.03                  0.16                    0.12               
 Environmental costs                                                                 —                      —                       —                     —                       0.02               
 Acquisition and integration related costs                                           0.03                   0.04                    0.13                  0.57                    0.13               
 Acquisition-related adjustments                                                     (0.01      )           0.02                    —                     0.04                    —                  
 Professional fees related to material weakness remediation and impairment analysis  —                      —                       0.04                  0.04                    0.04               
 Intellectual property defense                                                       —                      —                       —                     0.01                    0.01               
 Tax impact of adjustments                                                           (0.01      )           (0.01       )           (0.05       )         (0.43       )           (0.10      )       
 Adjusted diluted earnings (loss) per share attributable to ChampionX                0.07                   0.03                    0.13                  (0.19       )           0.99               





Free Cash Flow

                                                  Three Months Ended                                                                                    Years Ended                                             
                                                  Dec 31,                                    Sep 30,                           Dec 31,                  December 31,                                            
 (in thousands)                                   2020                                       2020                              2019                     2020                          2019                      
 Free Cash Flow                                                                                                                                                                                                 
 Cash provided by operating activities            $        120,608                           $      111,399                    $     32,509             $      310,040                $      155,899            
 Less: Capital expenditures                       (12,994           )                        (12,847         )                 (8,191         )         (45,163           )           (39,780           )       
 Free cash flow                                   $        107,614                           $      98,552                     $     24,318             $      264,877                $      116,119            
 Cash transaction expenses                        7,892                                      33,428                            1,059                    84,136                        1,059                     
 Adjusted free cash flow                          $        115,506                           $      131,980                    $     25,377             $      349,013                $      117,178            
                                                                                                                                                                                                                
 Cash From Operating Activities to Revenue Ratio                                                                                                                                                                
 Cash provided by operating activities            $        120,608                           $      111,399                    $     32,509             $      310,040                $      155,899            
 Revenue                                          706,122                                    633,526                           247,748                  1,899,996                     1,131,251                 
                                                                                                                                                                                                                
 Cash from operating activities to revenue ratio  17                         %               18                     %          13                 %     16                    %       14                    %   
                                                                                                                                                                                                                
 Free Cash Flow to Revenue Ratio                                                                                                                                                                                
 Free cash flow                                   $        107,614                           $      98,552                     $     24,318             $      264,877                $      116,119            
 Revenue                                          $        706,122                           $      633,526                    $     247,748            $      1,899,996              $      1,131,251          
                                                                                                                                                                                                                
 Free cash flow to revenue ratio                  15                         %               16                     %          10                 %     14                    %       10                    %   





ChampionX is providing the below unaudited supplemental historical financial
information of the Company on a non-GAAP adjusted basis for the three months
ended December 31, 2020, September 30, 2020 and December 31, 2019 and the
years ended December 31, 2020 and 2019 as if the Merger was completed on
January 1, 2019, to assist investors in assessing ChampionX’s historical
performance on a basis that includes the combined results of operations of
both legacy Apergy Corporation and legacy ChampionX. The unaudited pro forma
historical financial information has been prepared by ChampionX using
assumptions that ChampionX believes provide a reasonable basis for presenting
the combination of the historical financial information of legacy Apergy and
legacy ChampionX. As legacy ChampionX historically was unable to allocate
certain charges on a segment basis, we have determined an allocation
methodology for historical pro forma information to provide additional
comparability amongst the legacy ChampionX segments. ChampionX management
believes this unaudited supplemental historical financial information helps
investors understand the long-term profitability trends of its newly combined
business giving effect to the Merger and facilitates comparisons of our
profitability to prior and future periods and to our peers. The supplemental
unaudited financial information herein may not be comparable to similarly
titled measures reported by other companies. The supplemental unaudited pro
forma combined financial information does not purport to represent what the
actual results of operations or the financial position of the combined company
would have been had the Transactions occurred on the dates assumed, nor are
they indicative of future results of operations or financial position of the
combined company.





CHAMPIONX CORPORATION
PRO FORMA BUSINESS SEGMENT DATA
(UNAUDITED)

                                                                      Three Months Ended                                                                          Years Ended                                            
                                                                      Dec 31,                                 Sep 30,                    Dec 31,                  December 31,                                           
 (in thousands)                                                       2020                                    2020                       2019                     2020                          2019                     
 Segment revenue:                                                                                                                                                                                                        
 Production Chemical Technologies                                     $        446,652                        $     410,151              $     518,181            $      1,800,175              $     2,011,724          
 Production & Automation Technologies                                 158,777                                 136,921                    203,625                  615,918                       884,364                  
 Drilling Technologies                                                23,568                                  15,715                     44,123                   116,186                       246,887                  
 Reservoir Chemical Technologies                                      30,937                                  21,264                     56,340                   129,168                       313,157                  
 Corporate and other                                                  46,188                                  49,475                     76                       113,580                       222                      
 Total revenue                                                        $        706,122                        $     633,526              $     822,345            $      2,775,027              $     3,456,354          
                                                                                                                                                                                                                         
 Income (loss) before income taxes:                                                                                                                                                                                      
 Segment operating profit:                                                                                                                                                                                               
 Production Chemical Technologies                                     $        49,973                         $     42,793               $     80,527             $      200,335                $     246,913            
 Production & Automation Technologies                                 (4,711            )                     (7,454         )           2,175                    (697,899          )           54,024                   
 Drilling Technologies                                                153                                     (5,127         )           8,644                    2,574                         73,497                   
 Reservoir Chemical Technologies                                      464                                     (3,562         )           (4,050         )         (174,635          )           9,676                    
 Total segment operating profit (loss)                                45,879                                  26,650                     87,296                   (669,625          )           384,110                  
 Corporate and other                                                  4,968                                   5,717                      5,386                    21,000                        17,880                   
 Interest expense, net                                                15,495                                  15,935                     18,144                   65,433                        77,741                   
 Income (loss) before income taxes                                    $        25,416                         $     4,998                $     63,766             $      (756,058   )           $     288,489            
                                                                                                                                                                                                                         
 Operating profit margin / income (loss) before income taxes margin:                                                                                                                                                     
 Production Chemical Technologies                                     11.2                       %            10.4               %       15.5               %     11.1                  %       12.3                 %   
 Production & Automation Technologies                                 (3.0              )        %            (5.4           )   %       1.1                %     (113.3            )   %       6.1                  %   
 Drilling Technologies                                                0.6                        %            (32.6          )   %       19.6               %     2.2                   %       29.8                 %   
 Reservoir Chemical Technologies                                      1.5                        %            (16.8          )   %       (7.2           )   %     (135.2            )   %       3.1                  %   
 ChampionX Consolidated                                               3.6                        %            0.8                %       7.8                %     (27.2             )   %       8.3                  %   
                                                                                                                                                                                                                         
 Adjusted EBITDA                                                                                                                                                                                                         
 Production Chemical Technologies                                     77,872                                  71,505                     101,968                  300,629                       337,432                  
 Production & Automation Technologies                                 29,345                                  24,995                     35,667                   108,863                       179,818                  
 Drilling Technologies                                                2,525                                   (2,782         )           11,412                   17,312                        83,871                   
 Reservoir Chemical Technologies                                      2,204                                   (1,432         )           2,450                    (10,942           )           36,560                   
 Corporate and other                                                  (3,301            )                     (5,464         )           (984           )         (11,424           )           (1,662           )       
 Adjusted EBITDA                                                      $        108,645                        $     86,822               $     150,513            $      404,438                $     636,019            
                                                                                                                                                                                                                         
 Adjusted EBITDA margin                                                                                                                                                                                                  
 Production Chemical Technologies                                     17.4                       %            17.4               %       19.7               %     16.7                  %       16.8                 %   
 Production & Automation Technologies                                 18.5                       %            18.3               %       17.5               %     17.7                  %       20.3                 %   
 Drilling Technologies                                                10.7                       %            (17.7          )   %       25.9               %     14.9                  %       34.0                 %   
 Reservoir Chemical Technologies                                      7.1                        %            (6.7           )   %       4.3                %     (8.5              )   %       11.7                 %   
 ChampionX Consolidated                                               15.4                       %            13.7               %       18.3               %     14.6                  %       18.4                 %   





CHAMPIONX CORPORATION
PRO FORMA - RECONCILIATION GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED)

                                                                                     Three Months Ended                                                            Years Ended                                        
                                                                                     Dec 31,                    Sep 30,                   Dec 31,                  December 31,                                       
 (in thousands)                                                                      2020                       2020                      2019                     2020                        2019                   
 Net income (loss) attributable to ChampionX                                         $     12,305               $     4,667               $     65,996             $     (777,553  )           $     229,126          
 Pre-tax adjustments:                                                                                                                                                                                                 
 Goodwill and long-lived asset impairment                                            —                          —                         —                        805,011                     1,746                  
 Separation and supplemental benefit costs                                           105                        383                       331                      539                         6,377                  
 Restructuring and other related charges                                             4,971                      3,426                     6,351                    27,979                      23,974                 
 Environmental costs                                                                 —                          —                         —                        —                           1,988                  
 Acquisition and integration related costs                                           250                        250                       492                      1,134                       822                    
 Acquisition-related adjustments                                                     (3,683         )           (4,367        )           —                        (8,050          )           —                      
 Professional fees related to material weakness remediation and impairment analysis  512                        940                       2,780                    6,240                       2,780                  
 Intellectual property defense                                                       478                        408                       400                      1,278                       400                    
 Tax impact of adjustments                                                           (603           )           (238          )           (2,370         )         (28,903         )           (8,718         )       
 Adjusted net income (loss) attributable to ChampionX                                14,335                     5,469                     73,980                   27,675                      258,495                
 Tax impact of adjustments                                                           603                        238                       2,370                    28,903                      8,718                  
 Net income attributable to noncontrolling interest                                  124                        582                       2,215                    2,898                       8,216                  
 Depreciation and amortization                                                       65,101                     64,848                    58,249                   260,930                     231,702                
 Provision for (benefit from) income taxes                                           12,987                     (250          )           (4,445         )         18,598                      51,147                 
 Interest expense, net                                                               15,495                     15,935                    18,144                   65,434                      77,741                 
 Adjusted EBITDA                                                                     $     108,645              $     86,822              $     150,513            $     404,438               $     636,019          





CHAMPIONX CORPORATION
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES TO PRO FORMA FINANCIAL MEASURES
(UNAUDITED)

                                                                                     Three Months Ended December 31, 2020                                                    
 (in thousands, except per share data)                                               As Reported                   Adjustments ((1))                Pro Forma                
 Revenue                                                                             $     706,122                 $      —                         $     706,122            
                                                                                                                                                                             
 Net income (loss) attributable to ChampionX                                         $     7,357                   $      4,948                     $     12,305             
 Pre-tax adjustments:                                                                                                                                                        
 Separation and supplemental benefit costs                                           105                           —                                105                      
 Restructuring and other related charges                                             4,971                         —                                4,971                    
 Acquisition and integration related costs                                           5,854                         (5,604        )                  250                      
 Acquisition-related adjustments                                                     (2,878         )              (805          )                  (3,683         )         
 Professional fees related to material weakness remediation and impairment analysis  512                           —                                512                      
 Intellectual property defense                                                       478                           —                                478                      
 Tax impact of adjustments                                                           (2,070         )              1,467                            (603           )         
 Adjusted net income (loss) attributable to ChampionX                                14,329                        6                                14,335                   
 Tax impact of adjustments                                                           2,070                         (1,467        )                  603                      
 Net income attributable to noncontrolling interest                                  124                           —                                124                      
 Depreciation and amortization                                                       65,101                        —                                65,101                   
 Provision for (benefit from) income taxes                                           11,526                        1,461                            12,987                   
 Interest expense, net                                                               15,495                        —                                15,495                   
 Adjusted EBITDA                                                                     $     108,645                 $      —                         $     108,645            



                                                                                     Three Months Ended September 30, 2020                                                    
 (in thousands, except per share data)                                               As Reported                   Adjustments ((1))                 Pro Forma                
 Revenue                                                                             $     633,526                 $      —                          $     633,526            
                                                                                                                                                                              
 Net income (loss) attributable to ChampionX                                         $     (7,914   )              $      12,581                     $     4,667              
 Pre-tax adjustments:                                                                                                                                                         
 Separation and supplemental benefit costs                                           383                           —                                 383                      
 Restructuring and other related charges                                             3,426                         —                                 3,426                    
 Acquisition and integration related costs                                           8,665                         (8,415         )                  250                      
 Acquisition-related adjustments                                                     3,511                         (7,878         )                  (4,367         )         
 Professional fees related to material weakness remediation and impairment analysis  940                           —                                 940                      
 Intellectual property defense                                                       408                           —                                 408                      
 Tax impact of adjustments                                                           (3,968         )              3,730                             (238           )         
 Adjusted net income attributable to ChampionX                                       5,451                         18                                5,469                    
 Tax impact of adjustments                                                           3,968                         (3,730         )                  238                      
 Net income attributable to noncontrolling interest                                  582                           —                                 582                      
 Depreciation and amortization                                                       64,848                        —                                 64,848                   
 Provision for (benefit from) income taxes                                           (3,962         )              3,712                             (250           )         
 Interest expense, net                                                               15,935                        —                                 15,935                   
 Adjusted EBITDA                                                                     $     86,822                  $      —                          $     86,822             



                                                                                     Three Months Ended December 31, 2019                                                      
 (in thousands, except per share data)                                               As Reported                   Adjustments ((1))                  Pro Forma                
 Revenue                                                                             $     247,748                 $      574,597                     $     822,345            
                                                                                                                                                                               
 Net income (loss) attributable to ChampionX                                         $     (1,823   )              $      67,819                      $     65,996             
 Pre-tax adjustments:                                                                                                                                                          
 Separation and supplemental benefit costs                                           331                           —                                  331                      
 Restructuring and other related charges                                             2,556                         3,795                              6,351                    
 Acquisition and integration related costs                                           9,815                         (9,323          )                  492                      
 Professional fees related to material weakness remediation and impairment analysis  2,780                         —                                  2,780                    
 Intellectual property defense                                                       400                           —                                  400                      
 Tax impact of adjustments                                                           (3,772         )              1,402                              (2,370         )         
 Adjusted net income attributable to ChampionX                                       10,287                        63,693                             73,980                   
 Tax impact of adjustments                                                           3,772                         (1,402          )                  2,370                    
 Net income attributable to noncontrolling interest                                  249                           1,966                              2,215                    
 Depreciation and amortization                                                       30,308                        27,941                             58,249                   
 Provision for income taxes                                                          (9,048         )              4,603                              (4,445         )         
 Interest expense, net                                                               9,075                         9,069                              18,144                   
 Adjusted EBITDA                                                                     $     44,643                  $      105,870                     $     150,513            



                                                                                     Years Ended December 31, 2020                                                                 
 (in thousands, except per share data)                                               As Reported                     Adjustments ((1))                  Pro Forma                  
 Revenue                                                                             $     1,899,996                 $      875,031                     $     2,775,027            
                                                                                                                                                                                   
 Net loss attributable to ChampionX                                                  $     (743,930   )              $      (33,623  )                  $     (777,553   )         
 Pre-tax adjustments:                                                                                                                                                              
 Goodwill and long-lived asset impairment                                            657,251                         147,760                            805,011                    
 Separation and supplemental benefit costs                                           539                             —                                  539                        
 Restructuring and other related charges                                             23,291                          4,688                              27,979                     
 Acquisition and integration related costs                                           84,779                          (83,645         )                  1,134                      
 Acquisition-related inventory step-up                                               6,463                           (14,513         )                  (8,050           )         
 Professional fees related to material weakness remediation and impairment analysis  6,240                           —                                  6,240                      
 Intellectual property defense                                                       1,278                           —                                  1,278                      
 Tax impact of adjustments                                                           (63,368          )              34,465                             (28,903          )         
 Adjusted net income (loss) attributable to ChampionX                                (27,457          )              55,132                             27,675                     
 Tax impact of adjustments                                                           63,368                          (34,465         )                  28,903                     
 Net income attributable to noncontrolling interest                                  1,577                           1,321                              2,898                      
 Depreciation and amortization                                                       214,362                         46,568                             260,930                    
 Provision for (benefit from) income taxes                                           (20,396          )              38,994                             18,598                     
 Interest expense, net                                                               51,731                          13,703                             65,434                     
 Adjusted EBITDA                                                                     $     283,185                   $      121,253                     $     404,438              



                                                                                     Years Ended December 31, 2019                                                                   
 (in thousands, except per share data)                                               As Reported                     Adjustments ((1))                    Pro Forma                  
 Revenue                                                                             $     1,131,251                 $      2,325,103                     $     3,456,354            
                                                                                                                                                                                     
 Net income attributable to ChampionX                                                $     52,164                    $      176,962                       $     229,126              
 Pre-tax adjustments:                                                                                                                                                                
 Goodwill and long-lived asset impairment                                            1,746                           —                                    1,746                      
 Separation and supplemental benefit costs                                           6,377                           —                                    6,377                      
 Restructuring and other related charges                                             9,307                           14,667                               23,974                     
 Environmental costs                                                                 1,988                           —                                    1,988                      
 Acquisition and integration related costs                                           10,145                          (9,323            )                  822                        
 Professional fees related to material weakness remediation and impairment analysis  2,780                           —                                    2,780                      
 Intellectual property defense                                                       400                             —                                    400                        
 Tax impact of adjustments                                                           (7,777           )              (941              )                  (8,718           )         
 Adjusted net income attributable to ChampionX                                       77,130                          181,365                              258,495                    
 Tax impact of adjustments                                                           7,777                           941                                  8,718                      
 Net income attributable to noncontrolling interest                                  796                             7,420                                8,216                      
 Depreciation and amortization                                                       119,938                         111,764                              231,702                    
 Provision for income taxes                                                          6,226                           44,921                               51,147                     
 Interest expense, net                                                               39,301                          38,440                               77,741                     
 Adjusted EBITDA                                                                     $     251,168                   $      384,851                       $     636,019              

_______________________
((1)  Includes the impact of the historical legacy ChampionX business on a
stand-alone basis adjusted to give effect to the Merger under the acquisition
method of accounting in accordance with Accounting Standards Codification
805, Business Combinations (“ASC 805”). The adjustments were prepared on
the same basis as the adjustments included in our Registration Statement on
Form S-4 (File No. 333-236379) and include a decrease in amortization and
depreciation resulting from the preliminary purchase price adjustments, an
increase in interest expense associated with the new term loan facility,
removal of acquisition and integration related costs attributable to the
Merger as well as the tax impact of those adjustments.)



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GlobeNewswire, Inc. 2021
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